INTL FCStone offers price risk management solutions in coffee, sugar and cocoa.
On average, over 2.25 billion cups of coffee are consumed in the world every day, primarily in industrialized countries, while coffee production takes place mainly in developing countries. Brazil, Vietnam and Indonesia are the three biggest world coffee producers.
The price of sugar is heavily dependent upon global supply and demand forces. Today, the world’s sugar situation is complicated even more by the explosive emergence of the ethanol industry. Other factors that can heighten the volatility of sugar prices include global economic conditions, increased geo-political tension, trade liberalization initiatives, active index fund participation and energy prices. This volatility negatively impacts the sugar industry’s ability to maintain budgets, and achieve margin and profit objectives.
Working with FCStone to employ prudent risk management procedures, companies can more effectively manage their commodity price risk and successfully impact their profit margins. FCStone Sugar and Ethanol Consulting Group offers unique market intelligence and innovative financial solutions to address commodity price volatility and mitigate price risks. Through the Integrated Risk Management Program (IRMP), FCStone provides companies with the solutions, tools and platforms necessary to meet budgets, stabilize price inputs and ultimately secure margins.
The cocoa market, like other agricultural commodities, has been impacted by fundamental and financial factors which has resulted in considerable price volatility over the years.
Besides the normal factors that usually affect crop productivity, cocoa sub-product demand (i.e. chocolate) is influenced by world economic activity. Demand for such products is far more dependent on rising or falling household income than is the case for the commodities representing the basis of human nutrition, such as grains and sugar.
Economic and crop instability in cocoa's major producing country, Ivory Coast, speculative and index fund activities, and exchange rate volatility also affect prices.
The FCStone Cocoa Integrated Risk Management Program (IRMP) aims at assisting cocoa producers and processing companies in understanding factors that might affect price, as well as providing tools and strategies to protect their bottom-line results from adverse price movement and volatility.
For risks associated with trading on-exchange products, please see: http://www.intlfcstone.com/futures/Pages/default.aspx.